Economic highlights in the first quarter

Tuesday, 2018-04-03 11:43:48
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The manufacturing industry accounts for 61.1% of the total newly registered FDI capital (Illustrative image)
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NDO - The Vietnamese economy posted a high growth rate in the first quarter of 2018, in combination with a high trade surplus and curbed inflation, thanks to the positive influence of high economic growth since 2017, as well as the actions of the Government and the recovery of the global economy.

In the first few months of the year, the global economy continued to record positive recovery and higher growth than that of 2017 which was attributed to price stability, improved confidence among enterprises in the hope of tax reforms and finance stimulus from the new US administration, in addition to cyclical recovery in Europe and China's growth stimulus policy.

Furthermore, the trend of boosting trade liberalisation is still being maintained despite the concern for trade protectionism and trade warfare from the US.

The Vietnamese economy in the first quarter of this year featured the following positive factors:

High and equal economic growth

Vietnam's GDP in the first quarter of 2018 was estimated to increase by 7.38% over the same period last year (the highest increase in the past 10 years) and there were equal increases in all three sectors (agriculture, forestry and fisheries up by 4.05%; industry and construction up by 9.70%; and services up by 6.70%). In particular, the manufacturing industry saw an increase of 13.56% the highest rise in the past seven years.

Total investment for social development at current prices was estimated at over VND331 trillion (US$14.56 billion), up 10.4% over the same period last year, largely contributed to by the private sector at VND138.8 trillion (US$6.11 billion), accounting for 41.9% of total investment.

Despite the pressure of price increases in several public services, as well as petrol prices, salaries, and others, the consumer price index (CPI) was kept under control with the March CPI decreasing by 0.27% over the previous month, as the average CPI in the first quarter rose by 2.82% and average inflation increased by 1.34%.

Tax rates imposed on automobiles imported from ASEAN countries were reduced to 0%, in addition to sharp declines in pork and vegetable prices contributed to stabilising market prices.

State budget revenue and expenditures, along with monetary -financial balance, remained relatively positive. Banking interest rates have also stayed stable, while the stock market re-established its highest peak of 10 years ago.

Improved motivation and confidence

The first quarter of this year witnessed a sharp increase in the number of newly registered enterprises and the disbursement of FDI, in addition to an enhanced business environment and lower unemployment rate, among others.

As many as 26,785 enterprises registered to establish in the three-month period, the highest number in the past seven years and 8,449 enterprises resumed their operations, while the number of enterprises that ceased operations decreased by 1.4%.

The latest survey shows that more than 75.4% of enterprises in the manufacturing industry said their business and production activities were stable and better than the previous quarter and 89.6% of enterprises expect better performance in the second quarter of this year.

Only 24.4% of businesses had a lower number of orders in the first quarter and 9.2% of businesses predicted that their orders will decrease in the second quarter of 2018.

The total retail sales of goods and services in the first quarter was reported at VND1,048 trillion (US$46.11 million), up 9.9% over the corresponding period last year.

In addition, FDI disbursement reached over US$3.8 billion in the three-month period, up 7.2% over the same period in 2017. About 618 new projects were licensed during the period, up 25.4% over the same period last year. Moreover, the manufacturing industry accounted for 61.1% of the total newly registered capital.

Trade surplus recorded from the first quarter

Vietnam's total export turnover was estimated at over US$54.31 billion in the January-March period, up 22% against the same period last year. In particular, export growth rates increased in almost all markets, including China (up 46%), the Republic of Korea (up 35.8%), the EU (up 19.7%), ASEAN (up 13.5%), Japan (up 12%) and the US (up 11.6%).

Thanks to a 22% rise in export growth, Vietnam enjoyed a trade surplus of US$1.3 billion in the first three months of this year.

Such positive outcomes were attributed to the good economic growth rate since the fourth quarter of 2017, as well as the results from continuous reforms in the investment environment, and grasping new opportunities from the stable economic development in the world.

In addition, efforts from enterprises themselves and drastic measures from the Government have helped to boost the national economic in the first quarter of this year.